I'm normally very dovish, but even I admit that the case for a rate cut was pretty evenly balanced given recent data. And projections about future Fed policy are almost pointless: everything depends on whether Trump really does what he's been saying he will, in which case hard to see any cuts - ThreadSky

pkrugman.bsky.social • 73 days ago

I'm normally very dovish, but even I admit that the case for a rate cut was pretty evenly balanced given recent data. And projections about future Fed policy are almost pointless: everything depends on whether Trump really does what he's been saying he will, in which case hard to see any cuts

Comments

thehierophant.bsky.social•73 days ago

Trumpflation gonna be a thing?

xchuman.bsky.social•72 days ago

I'd certainly like to know.....

nauticavan.bsky.social•72 days ago

It will but his voters and the press won’t blame it on him

bygonebegotrisk.bsky.social•72 days ago

7% mortgages forever.

bullfox.bsky.social•73 days ago

The problem is that the more people tell Trump not to do something the more likely he is to do it.

beerwench.bsky.social•72 days ago

I’m at a point where I just want to burn it all down. Why be dovish? Sometimes arson is the right answer.

toxteth1.bsky.social•72 days ago

That means Trump owns this downturn...

xchuman.bsky.social•72 days ago

hahahaha you think he'll take responsibility for anything? I can hear it now "it was such a mess when we got here. no one has seen anything like it."

toxteth1.bsky.social•72 days ago

Of course he won't. But we'll know...

triplozero.bsky.social•73 days ago

You don't foresee Trump sacking the federal reserve, and lowing interest rates to zero, at least for the ruling class.

the-old-dog.bsky.social•72 days ago

🎯

dollymad1812.bsky.social•72 days ago

Sir, how will Trump’s tariffs affect interest rates if he implements them?

patrickmarren.bsky.social•72 days ago

Until he fires the Fed chair.

stymied.bsky.social•72 days ago

BTW: Has anyone asked Powell point blank if he signed Trump's loyalty pledge?

stymied.bsky.social•72 days ago

Soon after Trump started his obnoxiously stupid trade war, the economy began slowing. Trump never gave a second thought to badgering J.Powell on a daily basis, within a few months, Powell capitulated to Trump's demands and started cutting rates.

This happened before Covid.

This will happen again.

mr7077.bsky.social•72 days ago

Will we see the 10yr at 5% before inauguration ?

kimphilbywasbad.bsky.social•73 days ago

Stock market hated powells remarks but I thought they were dovish.

nailyard.bsky.social•72 days ago

Are we already seeing markets reacting to Trumpinomics.

ivan-cheddar.bsky.social•73 days ago

If tariffs go through then we’re going to have to cut rates. The economy will be in the tank

surfingthepast.bsky.social•72 days ago

Cutting rates while tariffs are raising prices = double inflation.

tongueofwood.bsky.social•72 days ago

The voters are not the only low information members of the MAGA movement, but the GOP has long favored tax cuts independent of economic indicators.

laurentguy.bsky.social•73 days ago

If Trump does impose high tariffs and then forces the Fed to cut rates through political pressure, then we’re looking at a very bad financial result. Including high inflation.

stymied.bsky.social•72 days ago

disagree

cristian2023.bsky.social•73 days ago

Trump looks more and more like Erdogan

bullfox.bsky.social•73 days ago

You expressed a though that for me had not quite yet come to the surface of my conscious mind.

benwest500.bsky.social•73 days ago

Except he will be vastly less competent and fail.

laurentguy.bsky.social•73 days ago

Yes, like a combination of Erdogan and Orban.

picktruck.bsky.social•73 days ago

If my memory does not fail me, Erdogan’s bodyguards beat oversea Turkish protesters furiously on the soil of the United States during Erdogan’s visit to the White House when Trump served his first term. Trump said NOTHING and did NOTHING.

xchuman.bsky.social•72 days ago

Personally I took risk out of my retirement funds. Now off to buy popcorn and wine to watch how this show goes......

janethaz.bsky.social•73 days ago

The only people who want zero interest rates is the financial sector who want it for short term loans to move money around to make more money.

sjclermont.bsky.social•73 days ago

Why would the Fed be the one institution insulated from pre-emptive surrender to Trump's wishes?

michalef.bsky.social•73 days ago

Once crypto bros figure out cuts are good for crypto (somebody, please, correct me if I am wrong), they may get quite angry with Donold.

liberalshark.bsky.social•73 days ago

I'm pretty certain you're correct on this. Rate cuts mean bonds are less attractive and investors will put their money into stocks and crypto.

nodanaonlyjules.bsky.social•73 days ago

Yes, and...cash becomes "cheaper" due to the attendant reduction in lending rates, allowing more appetite for more speculative "risk on" asset classes like crypto.

michalef.bsky.social•72 days ago

Good point! Did not take this into account, thanks :)

michalef.bsky.social•72 days ago

My thinking exactly.

gregory-l-weaver.bsky.social•72 days ago

When you pair that with subsidies and other programs to get companies to drive worker productivity the net result will be a structural readjustment of the US economy which should lay the foundation for the next 50 year supercylce.

gregory-l-weaver.bsky.social•72 days ago

So what we should be doing is holding interest rates at 5 percent and the offsetting that with QE to keep banks and other investors pushing money into the private sector and driving no housing inflation faster relative to housing inflation.

gregory-l-weaver.bsky.social•72 days ago

It's the wrong signal entirely really, Americans are spending to much and saving to little and the way you fix that is higher interest rates. Problem is we can't count on other countries like China to consume more and save less.

alexb4u.bsky.social•72 days ago

And yet the market (behaving like lemmings) ran off the cliff today.

mjk4mj.bsky.social•72 days ago

Right-winger Milei put 57% of Argentinians into poverty (6 million into extreme poverty), 200% annual inflation rate, 35% interest rate and a recession all in Milei's 1st year. He's not missing any meals as he jets off to give thumbs up with Musk.
September 2024: https://www.agenzianova.com/en/news/Argentina-President-Milei-Meets-Musk-in-New-York-Third-Meeting-in-Six-Months-Video/

mjk4mj.bsky.social•72 days ago

Trump said Putin made a genius move invading Ukraine (700,000 Russians dead). What Trump and every Trumpublican wants for the US.
October 25, 2024: "Russian central bank hikes interest rate to record-high 21% to fight inflation" https://www.euronews.com/business/2024/10/25/russian-central-bank-hikes-interest-rate-to-record-high-21-to-fight-inflation https://www.bluewin.ch/en/news/international/russian-supermarkets-lock-up-butter-2459625.html

we-are-toast.bsky.social•73 days ago

If Trump sees the stock market falling, count on him to be looking for more bribes to dump Powell and put someone in who would quickly lower rates.
Asset bubbles here we come.

lucastosborne.bsky.social•72 days ago

📌

tinajreid.bsky.social•73 days ago

Agree 100%. If he follows through, increases are far more likely.

mikejrob.bsky.social•72 days ago

Which means we ought to worry a lot about future Fed independence, perhaps one of the gravest risks of the next administration.

yoclockface.bsky.social•73 days ago

Rates should have started being raised in '16, when things were still good from the Obama economy. Hump wanted those tax giveaways to temp gin up the economy as they will. There was nowhere to cut when we needed it in '20. We'll get 1 year of hot air then poof.

mwilbert.bsky.social•72 days ago

The Fed did start raising rates in 2016, and kept raising them until mid-2019 when they started worrying about growth amid some of Trump's trade nonsense.

yoclockface.bsky.social•72 days ago

It was at 1.5 when Covid hit, so no, they did not, not really and my point was that there was nearly nowhere down to go when the pandemic hit. 1.25 in '17. So nope he goes after TPP and Nafta on Day 1. We normally raise rates in a hot economy and that is what Obama left us, despite the gop nonsense

stymied.bsky.social•72 days ago

Soon after trump started his obnoxiously stupid trade war, the economy started shrinking. Trump publicly badgered J.Powell to step in and lower rates, after a few months of badgering, Powell capitulated. This was in 2019, prior to Covid.

yoclockface.bsky.social•72 days ago

We had lil to no room to lower when the pandemic hit. Rates usually go up when the economy is hot as in '16, but I post the real #'s , that did not happen.

stymied.bsky.social•71 days ago

The fed began tightening while Obama was still in office. Obama achieved > 6% GDP quarterly growth. Industrial production was > 18% of GDP prior to Trump's obnoxious stupid trade war.

stirlingnewberry.bsky.social•73 days ago

Sometimes it is better to consult the eight ball then the charts.

Trump could very easily have us back at 22% as Fed Funds index. And I wish I were exaggerating.

domfaultz.bsky.social•72 days ago

No more cuts and inflation coming back? 🤓

gabrielarana.bsky.social•73 days ago

The other question here: Will the markets restrain or deter Trump from the worst promises he’s made? The bankers seem optimistic …

Comments

Posting Rules

Reply